The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has launched a public consultation to revise its prudential framework for lower-risk financial firms.
Detailed in Consultation Paper No. 2 of 2025, the proposals target Authorised Persons operating under Categories 3B, 3C, and 4 of the FSRA’s Prudential – Investment, Insurance Intermediation and Banking Rulebook (PRU).
The FSRA’s proposed changes include a recalibration of capital requirements for Category 4 firms, which typically engage in activities such as advising or arranging deals in investments without holding client assets. These changes are intended to ensure the prudential requirements remain proportionate to the risks these firms pose to the financial system.
In addition to capital adjustments, the consultation outlines amendments to reporting obligations for Category 3B and 3C firms. These entities, which often manage assets or deal in investments as agents, may face streamlined or modified reporting duties aimed at improving regulatory efficiency and alignment with international standards.
The FSRA also seeks to refine the professional indemnity insurance obligations within the PRU framework. These proposed changes would affect how firms demonstrate financial capacity to cover potential claims, ensuring consumer protection and operational resilience.
Stakeholders have until 21 May 2025 to provide their feedback on the proposed amendments. The FSRA encourages responses from affected firms, industry bodies, and other interested parties as it works to maintain a robust yet proportionate regulatory environment.
This consultation marks the FSRA’s ongoing commitment to adapting its framework in line with global best practices while supporting innovation and sustainable growth in the FinTech and financial services sectors.
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